diff --git a/src/ng/browser.js b/src/ng/browser.js
index 37f3ab297505..ed85631fce5e 100644
--- a/src/ng/browser.js
+++ b/src/ng/browser.js
@@ -1,6 +1,11 @@
 'use strict';
 /* global stripHash: true */
 
+function getHash(url) {
+  var index = url.indexOf('#');
+  return index === -1 ? '' : url.substr(index + 1);
+}
+
 /**
  * ! This is a private undocumented service !
  *
@@ -191,8 +196,10 @@ function Browser(window, document, $log, $sniffer) {
         }
         if (replace) {
           location.replace(url);
-        } else {
+        } else if (!sameBase) {
           location.href = url;
+        } else {
+          location.hash = getHash(url);
         }
       }
       return self;
diff --git a/src/ng/location.js b/src/ng/location.js
index c315551006ac..517e69361cab 100644
--- a/src/ng/location.js
+++ b/src/ng/location.js
@@ -68,6 +68,10 @@ function stripHash(url) {
   return index == -1 ? url : url.substr(0, index);
 }
 
+function trimEmptyHash(url) {
+  return url.replace(/#$/,'');
+}
+
 
 function stripFile(url) {
   return url.substr(0, stripHash(url).lastIndexOf('/') + 1);
@@ -847,10 +851,11 @@ function $LocationProvider() {
 
     // update browser
     $rootScope.$watch(function $locationWatch() {
-      var oldUrl = $browser.url();
+      var oldUrl = trimEmptyHash($browser.url());
+      var newUrl = trimEmptyHash($location.absUrl());
       var oldState = $browser.state();
       var currentReplace = $location.$$replace;
-      var urlOrStateChanged = oldUrl !== $location.absUrl() ||
+      var urlOrStateChanged = oldUrl !== newUrl ||
         ($location.$$html5 && $sniffer.history && oldState !== $location.$$state);
 
       if (initializing || urlOrStateChanged) {
diff --git a/test/ng/browserSpecs.js b/test/ng/browserSpecs.js
index 7153b1645fde..5ffaabc34cb1 100755
--- a/test/ng/browserSpecs.js
+++ b/test/ng/browserSpecs.js
@@ -1,5 +1,7 @@
 'use strict';
 
+/* global getHash:true, stripHash:true */
+
 var historyEntriesLength;
 var sniffer = {};
 
@@ -51,6 +53,12 @@ function MockWindow(options) {
       mockWindow.history.state = null;
       historyEntriesLength++;
     },
+    get hash() {
+      return getHash(locationHref);
+    },
+    set hash(value) {
+      locationHref = stripHash(locationHref) + '#' + value;
+    },
     replace: function(url) {
       locationHref = url;
       mockWindow.history.state = null;